Summit Drywall Inc. ordered to pay $550,000 to settle federal labor lawsuit

February 21, 2014

By Staff

NEW — 6 a.m. Feb. 21, 2014

An Issaquah drywall contractor has agreed to pay $550,000 to settle a U.S. Department of Labor lawsuit that alleged the company cheated nearly 400 workers out of overtime wages over a three-and-a-half year period.

Summit Drywall will pay $275,000 in back wages and another $275,000 in damages to workers who were illegally denied overtime compensation from October 2009 to April 2013, the labor department said Feb. 20.

About 380 current and former employees will receive money from the settlement, made final by a consent judgment in federal district court in Seattle.

Investigators found that drywall hangers and tapers were paid on a “piece-rate” basis and not compensated for all of the hours they worked, including time spent traveling between job sites and transporting equipment.

“In this region, long hours and low wages are prevalent in the drywall industry,” Janet Herold, the department’s regional solicitor in San Francisco, said in a statement. “This consent decree sends the unambiguous message that the department will not permit the underpayment of workers’ wages in piece-rate schemes.”

Under a piece-rate compensation system, workers’ pay is based on the quantity and quality of their output. While legal, it cannot be used to avoid paying workers at least minimum wage, or proper overtime premiums, said Donna Hart, district director for the department’s Wage and Hour Division in Seattle.

Summit Drywall employees regularly worked more than 40 hours a week, yet were not paid time and a half as required by the Fair Labor Standards Act, she said.

“Employers must keep accurate records, and they must count hours, even if they’re paying on a piece-rate basis,” she said.

Overtime-pay violations are common in piece-rate compensation systems, she added, “unless employers are very careful to comply with the law.”

Summit Drywall owner Thomas Kauzlarich did not immediately return a phone call seeking comment Feb. 20.

He’s required to pay the $550,000 within 70 days. Individual payouts will range from $150 to $4,000 per worker, Hart said.

As part of the settlement, Summit Drywall also must train employees about their rights under federal wage and hour laws. In addition, the company will write an article for a trade publication about an employer’s obligations under the Fair Labor Standards Act.

By Amy Martinez, Seattle Times reporter: 206-464-2923 or amartinez@seattletimes.com.

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Comments

2 Responses to “Summit Drywall Inc. ordered to pay $550,000 to settle federal labor lawsuit”

  1. Charles joslin on February 21st, 2014 7:58 pm

    I worked for this company for many years and he always has treated employees fair. If you needed extra all you had to do was adk. I worked for him from 1997 thru 2007. This is a great company and a few that cry wplf well they were wussies. Tommy would never do abutting to cheat you on purpose. I had broke Mt leg in 1099 and this guy supported me n my family for 9 months with no questions asked or payback. He’s done several things for me that I will always be indebted to him for si this is just a knock on the chin. Summit drywall will always be at the top no matter wh

    o the babies are!!!

  2. Donny Johnson on March 25th, 2014 6:41 pm

    Charles joslin – you say they are “cry babies” or “wussies” when in fact he got off cheap. The Feds did the investigation and because of this everything was factored off of Federal Minimum Wages which is $2 @ hour less than State Minimum Wage. The State did not go after him for ESD and workers compensation, the Feds did not go after SSA and even though he owed this also. Only a portion of the workers even received any of what they were owed. The Owner said he paid everyone approximately $20.00 an hour and most of this has to do with overtime that wasn’t paid so what he actually owed would be around 3 times as much.

    If you read the settlement agreement, the 384+ names all but 3 are Hispanic names so either he really liked to cheat Latino workers or he doesn’t hire guys with names like Jones or Kelly, etc. or both. In addition, his cheating cost honest employers significant amounts of work they should have gotten had he not decided to beat his workers out of wages to win bids. Employees of honest contractors lost work opportunities because of Summits actions, honest employers had to pay higher workers comp rates due to Summits cheating.

    In reality Summit got off easy, had this been Connecticut, California, Oregon, Florida, or New York the State Agency would have done their jobs and the owner of Summit Drywall would have went to jail which is where he belongs. Why should a criminal employer get amnesty just because he operates in Washington State? Why would an employee who steals $200 from his employer go to jail but when an employer steals a half a million dollars from his employees and the Government he only gets a slap on the hand and doesn’t have to admit guilt?

    You can find the consent decree here; http://docs.justia.com/cases/federal/district-courts/washington/wawdce/2:2013cv00683/192262/21/0.pdf

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